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     Response Letter

December 5, 2005

VIA EDGAR

Securities and Exchange
Commission
Mail Stop 6010
450 Fifth Street, N.W.
Washington, DC 20549
Attention:
Mr. Jay Webb

Re:       MIPS Technologies, Inc.

            Form 10-K for the year ended June 30, 2005

Filed September 9, 2005
            File No.
000-24487

Ladies and Gentlemen:

        Reference
is made to your letter dated November 2, 2005, addressed to MIPS Technologies, Inc.
regarding the above-referenced filing. The following information is provided in response
to such comments. Please note that the headings and numbers of the responses set forth
below correspond to the headings and numbers of the comments contained in your letter.

Form 10-K for the year
ended June 30, 2005

Consolidated Financial
Statements

Note 2.  Summary of
Significant Accounting Policies, page 36

Revenue Recognition, page 36

1.
We
see that you have multiple revenue generating activities, including licensing
          of technology, royalty agreements, and maintenance and support contracts.
Please           tell us and revise future filings to disclose how EITF 00-21 impacts
your           revenue recognition for each type of revenue source.

        We
advise the SEC Staff as follows regarding how EITF 00-21 impacts our revenue recognition.  Revenue earned
under contracts with our licensees is classified as either contract revenue or royalties. We recognize
revenues in accordance with SAB 104 and for multiple deliverable arrangements, we follow the guidance
in EITF 00-21 to determine whether there is more than one unit of accounting.  To the extent that the
deliverables are separable into multiple units of accounting, we then allocate the total fee on such
arrangements to the individual units of accounting using the residual method. We then recognize revenue
for each unit of accounting depending on the nautre of the deliverable(s) comprising the unit of
accounting (principally following SAB 104).

        Fees
for contracts for currently available technology include: license fees relating to our
intellectual property, including processor designs; maintenance and support, typically for one year;
and royalties payable following the sale by our licensees of products
incorporating the licensed technology. Generally, our customers pay us a single upfront fee that
covers the license and first year maintenance and support.  Our deliverables in these arrangements
include (a) processor designs and related intellectual property and (b) maintenance and support. The
license for our intellectual property, which includes processor designs, has standalone
value and can be used by the licensee without maintenance and support. Further, objective
and reliable evidence of fair value exists for maintenance and support based on specified
renewal rates. Accordingly, (a) license fees and (b) maintenance and support fees are
each treated as separate units of accounting. Total upfront fees are allocated to the license of
processor designs and related intellectual property and maintenance and support using the
residual method.  We view the royalty revenue as contingent revenue as discussed below.

        Contracts
relating to technology under development also can involve delivery of a license to intellectual
property, including processor designs. However, in these arrangements we undertake
best-efforts engineering services intended to further the development of certain
technology that has yet to be developed into a final processor design. Rather than paying
an upfront fee to license completed technology (as described above), customers in these
arrangements pay us milestone fees as we perform the engineering services. If the
development work results in completed technology in the form of a processor design and
related intellectual property, the customer is granted a license to such completed
technology at no additional fee. These contracts typically include the purchase of first year maintenance
and support commencing upon the completion of a completed processor design and related intellectual
property for an additional fee, which fee is equal to the renewal rate specified in the arrangement.
The licensee is also obligated to pay us royalties following the sale by our licensee of products
incorporating the licensed technology.  We continue to own the intellectual property that we
develop and we retain the fees for engineering services regardless of whether the work
performed results in a completed processor design.  Because the engineering activities are
best-efforts and at-risk and because the customer must pay an additional fee for first year
maintenance and support if the activities are successful, as we interpret EITF 00-21, the
maintenance and support is a contingent deliverable that is not accounted for upfront.
Accordingly, the fee associated with the engineering services is recognized in revenue as discussed
in our response to the Staff's Comment 2 below.

        We
advise the Staff that with respect to royalty agreements, there are no deliveables on our part beyond
the delivery of the intellectual property and we view the related revenue as contingent revenue.
Accordingly, royalty revenue is recognized in the quarter in which a report is received from a licensee
detailing the shipments of products incorporating our intellectual property, which is in
the quarter following the sale of the licensee’s product to its customer. Royalties
are calculated either as a percentage of the revenue received by the seller on sales of
such products or on a per unit basis. We periodically engage a third party to perform
royalty audits of our licensees, and if these audits indicate any over- or under-reported
royalties, we account for the results when they are identified.  See further discussion in our
response to the Staff's Comment 3, below.

        We
will revise our future filings to further clarify how EITF 00-21 impacts our revenue
recognition.

2.
We
noted that payments for licensing your technology generally include a
          nonrefundable technology license fee for currently available technology or a
          nonrefundable engineering service fee, which is payable upon achievement of
          defined milestones. Please explain to us in greater detail when you recognize
          amounts received under license agreements as revenue. It appears from your
          disclosure that you recognize all license fees as revenue upon execution of the
          license agreement, however, it also appears that you may have continuing
          obligations under certain arrangements. Please cite the authoritative
accounting           literature upon which you based your accounting. Consider expanding
your revenue           policy disclosures in future filings to address our concerns.

        We
derive revenue from license fees for currently available technology or from engineering
services for technology under development.  Each
of these types of contracts includes a nonexclusive license for the underlying
intellectual property. We supplementally advise the Staff that fees for contracts
relating to the currently available technology include: (a) license fees relating to the
license of processor design and related intellectual property, (b) maintenance and
support, typically for one year and (c) royalties which
are payable following the sale by our licenses of products incorporating the licensed
technology. Contracts relating to technology under development include (a) fees payable
as engineering services are performed (as noted in our response to Staff's Comment 1 above, there is
no separate fee for the license if the processor design is completed and the customer licenses the
intellectual property from us), (b) maintenance and support, typically for one year (which commences
only upon delivery of a completed processor design and related intellectual property)
and (c) royalties which are payable following the sale by our
licensees of products incorporating the licensed technology.

        Following
the guidance in SAB 104, fees for or allocated to licenses to currently available technology are
recorded as revenue upon the execution of the license agreement when there is persuasive evidence
of an arrangement, fees are fixed or determinable, delivery has occurred and collectibility is
reasonably assured.  We access the credit worthiness of each customer at the time the license
agreement is executed or when a transaction under the agreement occurs.  If collectibility is not
considered reasonably assured, revenue is recognized when the fee is collected.  Other than
maintenance and support, there is no continuing obligation under these arrangements after
delivery of the intellectual property.

        Fees
for engineering services in contracts for technology under development, which contracts
are preformed on a best efforts basis, are recognized as revenue as services are
performed; however, we limit the amount of revenue recognized to the aggregate amount
received or currently due pursuant to the milestone terms.  While there is little in the
way of authoritative literature covering revenue recognition on service transactions
other than the general guidance in SAB 104 and FASB Concept Statements, we believe this
methodology is consistent with the guidance discussed in the 2004 Miller Revenue
Recognition Guide, Chapter 6.  As noted above, we retain the fees for engineering
services regardless of whether the work performed results in a completed processor
design.  If the engineering services result in a completed processor design, other than
for first year maintenance and support, there are no continuing obligations under these
arrangements after delivery of the completed processor design and related intellectual property.

        We
further advise the Staff that we recognize revenue on mainteance and support arrangements
ratably over the period during which the obligation exists, typically 12 months.

        We
will revise our future filings to include discussion regarding revenue recognition as
noted in our response to the Staff’s comment.

3.
We
see that you reduced your royalty revenue by $900,000 in the second quarter           of
fiscal 2005 due to an over-reporting by one of your licensees. Please clarify
          for us when this error was detected and whether you restated any previously
          issued financial statements or quarterly data. If not restated, please tell us
          why no restatement was necessary. We may have further comments after reviewing
          your response.

        The
net over-reporting by a licensee was detected in December 2004 during an audit of previously
reported royalties at the licensee’s offices, which was conducted by a third-party
on our behalf. We did not restate previously issued financial statements or quarterly
data. Due to the complex nature of the calculations of royalties due
under certain of our arrangements, including those related to this particular
arrangement, exceptions noted in a royalty audit (which includes verification, on a test
basis, of a sample of royalty reports) often are not necessarily conclusive; rather, they
merely serve as a starting point for settlement discussions with the licensee. As a matter of our
policy and practice, we do not refund previously reported royalties.
Consistent with our policy, in settling this specific matter, we did not grant a refund
to the licensee. The net adjustment was settled as a reduction of future royalties due upon
the licensees sale of products incorporating previously licensed and delivered
intellectual property. Accordingly, because we are only obligated to reduce
future royalties due from this licensee, we concluded there was no basis for restating
prior periods.

Form 8-K dated October
20, 2005

4.
We
note that you present non-GAAP measures in the form of a statement of
          operations. That format may be confusing to investors as it reflects several
          non-GAAP measures, including research and development, sales and marketing as
          well as general and administrative line items that exclude GAAP amounts and
          which have not been identified or individually described to investors. In
          addition, you have not explained your purpose for presenting non-GAAP
          operational measures that are the same as the GAAP amounts. Please note that
          Instruction 2 to Item 2.02 of Form 8-K requires that when furnishing
information           under this item you must provide all the disclosures required by
paragraph           (e)(1)(i) of Item 10 of Regulation S-K and Question 8 of the FAQ
Regarding the           Use of Non-GAAP Financial Measures dated June 13, 2003, including
a           reconciliation to the directly comparable GAAP measure for each non-GAAP
measure           presented.

a)
To
eliminate investor confusion, please remove the non-GAAP statements of
               operation format from future filings and instead only disclose those
non-GAAP                measures used by management with the appropriate reconciliations.

b)
Otherwise,
confirm that you will revise your Forms 8-K in future periods to                provide
all the disclosures required by Item 10(e)(1)(i) of Regulation S-K for
               each non-GAAP measure presented in the statement, and provide us with a
sample                of your proposed disclosure. We may have further comments.

        We
did take into account the disclosure requirements of paragraph (e)(l)(i) of Item 10 of
Regulation S-K in formulating our disclosure in the Form 8-K dated October 20, 2005.
Nonetheless in response to subsection (a) of this comment we will in future Form 8-K
filings eliminate the non-GAAP statements of operation format and in its place will
reconcile more concisely the non-GAAP measures used by our management and referred to in
the body of the press release. Below is a sample of the non-GAAP presentation that we
would propose to make in future filings.

MIPS TECHNOLOGIES,
INC.

RECONCILIATION OF GAAP
TO NON-GAAP NET INCOME and NET INCOME PER SHARE

(In thousands, except
per share data)

(unaudited)

     Three Months Ended

September 30, 2005
     Three Months Ended

September 30, 2004

     GAAP net income (loss)

       $(3,861
     )

        $3,121

     (a)

     Equity-based compensation expense under SFAS 123R (see note below)

        $6,110

     —

     (b)

     Acquired in-process research and development (see note below)

          $570

     —

     (c)

     Restructuring charge (see note below)

     —

          $277

     (d)

     Income tax effect (see note below)

     $(1,536
     )

     $(61
     )

     Non-GAAP net income

        $1,283

        $3,337

     Non-GAAP net income per basic share

         $0.03

         $0.08

     Non-GAAP net income per diluted share

         $0.03

         $0.08

     Common shares outstanding - basic

     42,382

     40,695

     Common shares outstanding - diluted

     44,309

     42,384

        These
adjustments reconcile the Company’s GAAP results of operations to the reported
non-GAAP results of operations. The Company believes that presentation of net income and
net income per share excluding non-cash equity-based compensation, acquired in-process
research and development and restructuring costs provides meaningful supplemental
information to investors, as well as management, that is indicative of the Company’s
core operating results and facilitates comparison of operating results across reporting
periods. The Company uses these non-GAAP measures when evaluating its financial results
as well as for internal planning and budgeting purposes. These non-GAAP measures should
not be viewed as a substitute for the Company’s GAAP results, and may be different
than non-GAAP measures used by other companies.

               (a)

               Non-cash equity-based compensation